Energy Star and Energy Credits are Being Cancelled – Or Are They?

The Trump administration announced plans to eliminate the Energy Star program last month – a 33-year-old program that provides energy efficiency certification for various appliances, and which, by some accounts, has provided over $500 billion in energy savings to consumers and forced energy improvements in manufacturing technology.  The elimination of the program is supposedly part of a broad reorganization taking place at the EPA, and a number of media outlets have given great press to this so far.

What isn’t being discussed is the fact that President Trump tried this during his first term   and was unable to get it done given enormous pushback from Congress on both sides of the aisle, as well as strong objections from appliance manufacturers. The fact of the matter is that the Energy Star program is one of the most recognizable and well-regarded government operations among consumers. But Lee Zeldin, the Administrator of the EPA, and Chris Wright, the Secretary of the Department of Energy, have both indicated they feel that this program is not protected under federal statute, and as such it could be privatized, although that seems highly speculative at this juncture. Given the current administration’s tendency to look with disfavor upon any disagreement with stated policy, these comments from two fairly high-level executives should be noted carefully. 

That being said, we expect there to be strong legal challenges to any official moves made by the EPA to dismantle the Energy Star program, as it does appear Congressional approval would be legally required to eliminate the program. But in the meantime, this does create quite the conundrum for manufacturers and contractors engaged in marketing and advertising products under the Energy Star certification,  especially if energy pledges or warranties are tied into those certifications or ratings.

Only time will tell where this goes, but we have been advising clients to consider adjusting to more broadly accepted performance standards published by the Department of Energy, such as for window technologies and glazing systems, for example. 

As to energy efficient tax credits, those are established in Federal law, such as under the Inflation Reduction Act of 2022.  But they are targeted for elimination in the current “One Big Beautiful Bill,” which is poised to cut clean vehicle credits, the residential clean energy credit (which includes the solar tax credit), and the energy efficient home improvement credit.  Lawmakers are pushing to finalize the bill by the Fourth of July, so we may know sooner rather than later how the negotiations end up with regard to energy efficient tax credits. At this juncture, the likelihood is high that those are going to be coming to an end.